Slide 1: ABS East 2022 - Investor Presentation
ABS East 2022 - Investor Presentation October 2022
Slide 2: Forward-Looking Statements; Non-GAAP Financial Measures
Forward-Looking Statements; Non-GAAP Financial Measures The following information is current as of June 30, 2022 (unless otherwise noted) and should be read in connection with Navient Corporation’s “Navient” Annual Report on Form 10-K for the year end December 31, 2021 (the “2021 Form 10-K”), filed
Slide 3: Navient provides technology-enabled education finance and business processing solutions
Navient provides technology-enabled education finance and business processing solutions that simplify complex programs and help millions of people achieve success Our customer-focused, data-driven services deliver exceptional results for clients in education, health care and government Originations
Slide 4: Building Value and Driving Meaningful Returns
Building Value and Driving Meaningful Returns Since 2014 Separation 1 Originated nearly Loan Our competitive franchise, with its highly attractive return Originations $20 billion Private profile, leverages our core expertise to drive profits and growth Education Loans Loan Portfolios Acquired Accret
Slide 5: Delivering Long-Term Value
Delivering Long-Term Value Federal Education Loans Consumer Lending Business Processing Successfully assisted Originated $420 million of Navient employees continue borrowers in returning to high-quality Private Education to support our state and repayment Loans, targeting mid-teens municipal clients
Slide 6: Federal Education Loans Segment
Federal Education Loans Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter 2022 Highlights ($ In millions) Q2 22 Q1 22 Q2 21 Federal Education Segment net interest margin 1.11% 1.04% 0.97% Q2 22 Net Interest Margin: 111 bps Q2 22 Annualized Charge-off Rate: 9 bps FFE
Slide 7: Consumer Lending Segment
Consumer Lending Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter 2022 Highlights ($ In millions) Q2 22 Q1 22 Q2 21 Consumer Lending Segment net interest margin 2.66% 2.80% 2.95% Q2 22 Net Interest Margin: 266 bps Q2 22 Annualized Charge-off Rate : 140 bps Private
Slide 8: Business Processing Segment
Business Processing Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter 2022 Highlights ($ In millions) Q2 22 Q1 22 Q2 21 Business Processing Government Services $53 $49 $66 Q2 22 EBITDA Margin 1: 16% Healthcare RCM Services $34 $45 $64 • Revenue of $87 million, as pa
Slide 9: Federal Student Loan Forgiveness
Federal Student Loan Forgiveness • On August 24th, the Biden Administration and the U.S. Department of Education (“ED”) announced a three-part plan* to provide student debt relief to student loan borrowers. The plan continues to evolve since the announcement. Currently, final details have not been r
Slide 10: FFELP vs. In-School Private Education vs. Refi Private Education Student Loan Comparison
FFELP vs. In-School Private Education vs. Refi Private Education Student Loan Comparison(1) In-School Private ReFi Private FFELP Education Student Loans Education Student Loans Borrower Student or Parent Student or Parent Student or Parent Co-Signer None Typical Not Typical Lender Eligible banks and
Slide 11: FFELP ABS Issuance Characteristics
FFELP ABS Issuance Characteristics FFELP ABS Transaction Features Collateral Characteristics • Issue size of $500M+ • Guarantee of underlying collateral insulates bondholders from most risk of • Senior and subordinate notes loss of principal 1 • Amortizing tranches with 1 to 10(+) year average lives
Slide 12: Private Education Loan ABS Issuance Characteristics
Private Education Loan ABS Issuance Characteristics Private Education Loan ABS Transaction Features Collateral Characteristics • Issue size of $500M+ • Collateralized by loans made to students and parents to fund college tuition, room • Senior and subordinate notes and board - Seasoned assets benefi
Slide 13: Private Education Borrowers
Private Education Borrowers • Refinance Loans: - Using our data and expertise to deploy capital at mid-teens ROE - Life of loan loss expectation of 1.25% 1 - Weighted average life of ~3.5 years Typical Refi Borrower Profile 2 Borrower Age 32 Months since Graduation 71 Education 56% advanced degrees
Slide 14: Navient Private Education Trusts
Navient Private Education Trusts As of the respective cutoff dates for each transaction 2020-2022YTD Navient Issuance Program NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV 20-A 20-B 20-C 20-D 20-E 20-F 20-G 20-H 20-I 21-A 21-B 21-C 21-D 21-E 21-F 21-G 22-A 22-B Bond Amount
Slide 15: Navient Continues to Advance Environmental, Social and Governance Initiatives
Navient Continues to Advance Environmental, Social and Governance Initiatives Social Initiatives Environmental Initiatives Community partnerships • Ongoing efforts to reduce already low carbon footprint • National partnership with Boys & Girls Clubs of America to • Enterprise-wide emphasis on electr
Slide 16: Navient Corporation Appendix
Navient Corporation Appendix Confidential and proprietary information © 2022 Navient Solutions, LLC. All rights reserved. 16
Slide 17: Notes on Non-GAAP Financial Measures
Notes on Non-GAAP Financial Measures (Dollars in Millions) In addition to financial results reported on a GAAP basis, Navient also provides certain performance measures which are non-GAAP financial measures. The following non-GAAP financial measures are presented within this Presentation: 1. Core Ea
Slide 18: Notes on Non-GAAP Financial Measures
Notes on Non-GAAP Financial Measures (Dollars in Millions) 4. Earnings before Interest, Taxes, Depreciation and Amortization Expense (“EBITDA”) – This metric measures the operating performance of the Business Processing segment and is used by management and our equity investors to monitor operating
Slide 19: Differences Between Core Earnings and GAAP
Differences Between Core Earnings and GAAP Quarters Ended Core Earnings adjustments to GAAP: June 30, Mar. 31, June 30, (Dollars in Millions) 2022 2022 2021 GAAP net income (loss) $180 $255 $185 Net impact of derivative accounting (72) (159) (30) Net impact of goodwill and acquired intangible assets
Slide 20: Investor Relations Website
Investor Relations Website www.navient.com/investors www.navient.com/abs • NAVI / SLM student loan trust data (Debt/asset backed securities – NAVI / SLM Student Loan Trusts) - Static pool information – detailed portfolio stratifications by trust as of the cutoff date - Accrued interest factors - Qua